Bill could top $6M for Daytona's new homeless shelter

Eileen Zaffiro-Kean @EileenDBNJ

Sunday

Sep 9, 2018 at 5:18 PMSep 10, 2018 at 6:39 PM

On Friday afternoon seven bids for shelter construction were opened at City Hall. The two that made the cut for final consideration are the $4.84 million offer from Crunch Construction in Daytona Beach and the $4.43 million entry from APM Construction in New Smyrna Beach.

DAYTONA BEACH — Those who weren't happy about the $5.3 million estimate to complete site work and building construction on the new First Step Shelter aren't going to like this: Now it looks like the final price could come in around $6 million.

P&S Paving is already getting about $1.6 million to handle site work on the homeless shelter property on the city's western edge. On Friday afternoon seven bids for building construction were opened at City Hall, and the two that made the cut for final consideration are the $4.84 million offer from Crunch Construction in Daytona Beach and the $4.43 million entry from APM Construction in New Smyrna Beach.

Bidding rules put Crunch Construction and APM in a two-company battle that will get settled in a week. And when they resubmit bids, unless one of them plunges well below their initial proposal, city officials who had estimated a $3.67 million building construction cost will probably be digging deeper into their coffers.

Less than two weeks ago, City Manager Jim Chisholm asked city commissioners to allocate $2.8 million for the 100-bed shelter to supplement the $2.5 million the Volusia County Council sent for site work and construction. If commissioners OK that request in the coming months, that will make $5.3 million available to bring the shelter to life.

With the bids factored in now, it looks like about $6 million is going to be needed. If P&S Paving hadn't offered a $1 million break on its charges, the tally would have pushed past $7 million. Work also would have gotten pricier if the city had nothing but the three most expensive bids unsealed Friday, all of which topped $5 million.

Local builders say their costs have climbed about 20-30 percent over the past 18 months. But the numbers being thrown around for First Step Shelter expenses have mushroomed far more than that, leaving some people confounded.

"If there was a little more transparency it wouldn't be such shock and awe," said First Step Shelter Board member Bill Hall.

Jaws dropped after Chisholm told city commissioners at an Aug. 29 budget and project planning meeting that it looked like the total bill for First Step Shelter site preparation and construction was going to be $5.3 million. The expectation among many people was that the $2.5 million the county government gave would cover costs to get the building up.

"I never recall a figure above $2.1 million for a concrete block building," said Hall, who is the agency's secretary and keeps minutes of meetings. "I remember thinking $2.5 million was plenty of money."

Fellow First Step Shelter Board member Bill Milano, a retired high school principal, also never expected to see a $5.3 million price tag — much less a $6 million charge — for the shelter being built west of Interstate 95.

"I remember when I first got on the board hearing it would be about $2 million," said Milano, who's also a member of the Ponce Inlet Town Council. "I figured it might be a little higher, but $5.3 million kind of set me back."

A few top city officials, including City Commissioner Rob Gilliland, are surprised it was a surprise. Gilliland, who is able to regularly talk one-on-one with Chisholm, said residents shouldn't have assumed shelter construction costs would never rise above $2.5 million.

"The $2.5 million is what the county was going to give us to build the shelter, not what the shelter would cost," Gilliland said. "My expectations were always in the $4 million to $4.5 million range."

First Step Shelter Executive Director Mark Geallis has a similar memory from presentations he saw on the project before he was hired to lead the nonprofit agency.

"My recollection was that the $2.5 million from the county was never thought to be the entire amount," Geallis said. "I had seen previous presentations where I thought it was set at $4 million. Then I saw one where I thought it was $4.5 million."

Memories are different among several of the First Step Shelter Board members, who have been overseeing First Step Inc. since early 2017. Hall's recollection is that the board agreed to spend less than $2 million on a building that would be partly made of tensile fabric, and city staff never came back asking to double the price when they pushed toward the current plan for a concrete block building.

The board's involvement in building design "slowly faded away," as did its input on a final price, said Hall, who is mayor of South Daytona and that city's former police chief. He said he saw the $5.3 million figure for the first time in a News-Journal story.

"We are not briefed on anything," Hall said. "We get the agenda and attachments a day or two before the meetings and that's about the end of it."

Chisholm said there was an estimate in 2014 that a cement-block shelter could cost $4 million. But that was for a different iteration of a shelter on a different piece of property. City staff members and others involved in the shelter effort have batted around several different shelter designs at different prices over the past four years.

At an Aug. 29 budget and project planning meeting, Chisholm asked city commissioners to cover the gap left after the county's $2.5 million for construction is spent with another $2.8 million of city money. The first $1.2 million of that is plugged into the new city budget, which city commissioners will take a final vote on Sept. 19. The next $1.6 million would have to be approved in an amendment to the current budget, Chisholm said.

The city has also committed to giving $2 million over five years for shelter operating costs.

Story behind the numbers

The contractor ultimately chosen to build the shelter will have 210 days, essentially seven months, to complete the project. There could be $3,000 per day fines if the deadline is blown, according to the city's terms.

The 15,000-square-foot facility will have one single-story building with five wings that will house a men's dorm, women's dorm, kitchen, medical clinic and offices. The building will have what are known as tilt walls, precast solid concrete wall panels that are fitted into a stem-wall foundation. The pre-built tilt walls help shave weeks and sometimes months off construction time.

Geallis said work is well underway on the concrete footers the walls will fit into. The concrete slab that will become the shelter floor will be handled by the contractor who's awarded the bid, he said.

P&S Paving is handling some of that foundation preparation along with site work.

"Their contract scope is earthwork, sewer and water distribution, building foundations, paving, drainage, storm water management, curb and gutters as well as landscaping," said city spokeswoman Susan Cerbone.

P&S has charged $1.6 million so far, and was going to charge another $1.06 million to carve out a 20-acre retention pond on the undeveloped city land, which will create a stockpile of fill dirt that promises to be a much-sought-after commodity among local developers. A deal was cut for P&S to instead do the retention pond work for free, give the city a little over $1 million and then gain the right for the company to sell the dirt, which can go for around $200 a truckload.

If the deal hadn't been made, the total site work bill could have risen to $2.66 million.

Hall is stunned by the seven-figure price tags wafting over the muddy shelter site.

"Aren't we basically building a dorm?" he said. "And we're paying $300-$400 per square foot? It's a block building for heaven's sake."

Cerbone said a number of things drove up the price.

"Originally the site was 5 acres, and it has grown to 10 acres," she said. "It was completely wooded with no utilities to the site. Other proposed sites had utilities already. De-watering the site was necessary when rainfall was heavy earlier this summer."

Plans for the shelter building have also evolved since the original proposal from a consultant four years ago, she said. The initial $2.5 million construction estimate "was a very early approximation prior to engineering and architectural design," she said.

One of the early concepts involved "a minimal, bare bones facility with temporary trailers for restrooms" and modular buildings for dorms, she said.

"Then it evolved into a discussion using an open-space warehouse type facility with a fabric roof," Cerbone said. "Cost projections have been revised as design input has been received from service providers."

Chisholm said the red-hot local construction market has had a huge impact on shelter costs.

Hot market, high costs

In the 18 months since shelter plans got serious, escalating building material costs and the constant demand for skilled construction workers has made it more and more expensive to build a new home or business in Volusia County.

Scott Vanacore, president and co-owner of Vanacore Homes, said everybody involved in construction, from surveyors to cleaning crews who get a new building ready to open, have jacked up their prices. New tariffs on some building products haven't helped, said Vanacore, who has built more than 3,000 homes and over 1 million square feet of commercial space in Volusia and Flagler counties over the past 30 years.

Paul Holub Jr., owner of Ormond Beach-based Holub Development Company, can attest to rising construction costs. In his site work and small commercial building development, he's seen $90 per yard concrete rise to $120, and a $5 or $6 rod of steel rebar shoot up to $9.45.

He said he could see why P&S Paving would want to sell fill dirt since it's also "expensive and hard to come by today."

"Between labor and materials it's very difficult to get anything built," Holub said. "You almost have to take what you get in terms of price."

Nonetheless, Holub said he was "shocked" by the latest First Step Shelter price.

"It's a shame because it's a project that's needed," he said.

Jamie Adley, owner of South Daytona-based Adley Homes, is also trudging through price hikes.

"In 2004 and 2005 costs went up, but I don't recall it going up this much," Adley said.

Adley said he used to be involved with Habitat for Humanity, and he sees the need for First Step Shelter.

"We need a bigger and better safety net," he said. "And whatever the number for the shelter is, it's less expensive than putting them in jail."

Chisholm said last week he doesn't want taxpayers to think there was "a disregard for public funds."

"We are still engaged in trying to find solutions," the city manager said. "We put quite a bit of effort into it. We looked at every option to make it effective and affordable."

While some taxpayers and First Step Shelter Board members aren't crazy about the project's price, no one has talked about pulling the plug.

"It's an awful lot of money," Hall said. "But I'm afraid if we made any major changes now it would delay the process."

Mayor Derrick Henry, who serves as president of the First Step Shelter Board, also said last week "the price we're having to pay is greater than I hoped it would be." Henry had expected to cap costs at $4 million, but he said the shelter "has to be able to serve their needs."

"The purpose isn't just to house them for six to nine months," the mayor said. "The ultimate objective is to get people graduated from the condition they're in. We have to continue to press forward."

Hall is still hoping for a happy ending.

"I think we're all equally frustrated with the delays and cost overruns," Hall said. "I was hoping First Step Shelter would be something I could be proud of. Maybe it still will be."

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.